“…The supervisory dividend restrictions can then be justified and timely in the face of an economic downturn to induce banks to conserve capital and provide lending to the real economy. It is worth pointing-out that dividend restrictions can have also short-term negative effects on banks' stock prices, in particular when the lifting of restrictions is uncertain, see for instance the recent evidence in Andreeva et al (2021) and Matyunina and Ongena (2022), as well as previous work by Lee (1995). 4 More generally, dividends are considered as the most important form of payout and enterprises tend to distribute a substantial percentage of their earnings as dividends, Allen and Michaely (1995).…”